Indonesia Plans Increase in Palm Oil-based Biodiesel In 2025
JAKARTA, July 24 (Reuters) - Indonesia, the world's greatest palm oil producer, is evaluating fuel with a view to increasing to 40% from 35% the share of palm-oil combined into biodiesel next year, the energy ministry stated.
If carried out, the B40 mandate could increase biodiesel intake to up to 16 million kilolitres (KL) next year, the ministry stated, from 13 million KL approximated to be consumed in 2024.
"We hope the trials could be ended up in December, so that full implementation of B40 might be performed in 2025," energy ministry senior official Eniya Listiani Dewi stated in a statement on Tuesday.
The Indonesian Biofuel Producers Association (APROBI) said the industry had the capability to satisfy B40 need, with set up capability anticipated to rise to 20 million KL annually next year from 18 million KL now.
"However we will require more basic materials to fulfill B40 demand," Ernest Gunawan, the secretary general of APROBI told Reuters on Wednesday.
The biodiesel market would need 13.9 million metric lots of crude palm oil to produce 16 million KL biodiesel next year, from the estimated 11 million lots required this year, he added.
Indonesia's biggest palm oil association GAPKI said a decline in exports indicated there would be sufficient basic materials to the B40 mandate for now.
But the industry would require to assess "which one would be more valuable", GAPKI chairman Eddy Martono stated, describing the possibility an increase in exports would make supplying the domestic market less practical.
Indonesia's palm oil output is estimated to reach 54.4 million lots in 2024, a 2.26% increase from last year, while exports are expected to decrease by 2.47% to 29.5 million tons as domestic intake rose, driven by biodiesel required.
The ministry had actually tested the biodiesel, blended with 40% of palm oil, on a train for the very first time previously this week, while planning to evaluate the B40 mix on agriculture equipment, power plants and in the shipping industry, it said. (Reporting by Bernadette Christina and Dewi Kurniawati; Writing by Stanley Widianto; Editing by John Mair, Savio D'Souza and Barbara Lewis)